motor trade insurance Compare quotes to find the best insurance policy for you
Motor trade insurance, also known as traders insurance, is a type of insurance policy designed specifically for businesses involved in the buying, selling, repairing, or maintenance of vehicles. It provides cover for the unique risks associated with these activities, such as driving customer vehicles,road risks, equipment damage and premises liability,
Key Features and Coverage:
Road Risks:
This is a core component of motor trade insurance, covering damage or injury caused while driving customer vehicles or your own vehicles as part of your business.
Equipment and Premises:
Policies often cover equipment used in the business, such as tools and machinery, and protect against damage or theft to the business premises.
Liability:
Motor trade insurance can provide liability cover against claims arising from accidents or incidents involving your business, including customers and employees.
Third-Party Liability:
This covers damage to property or injury to others caused by you or your employees while operating vehicles.
Fire and Theft:
Some policies include cover for fire damage, theft, and malicious damage to vehicles or equipment.
Types of Policies:
Road Risks:
This is the minimum level of cover needed for those who drive vehicles in the course of their business, whether they are their own or customer’s vehicles.
Combined Policies:
These offer a broader range of coverage, including road risks, equipment, and premises.
Who Needs Motor Trade Insurance?
Vehicle Dealers:Businesses that buy, sell, or trade vehicles.
Mechanics and Repair Shops:Businesses that repair and service vehicles.
MOT Test Centers:Businesses that conduct MOT tests.
Valeters and Detailers:Businesses that clean and maintain vehicles.
Breakdown and Recovery Services:Businesses that offer roadside assistance.
Businesses that carry out vehicle modifications or customisations
Motor trade insurance in the UK: a comprehensive overview
Motor trade insurance, also known as trader’s insurance, is a specialised policy designed to protect businesses operating within the automotive industry in the UK. It provides coverage for a wide range of activities, including buying and selling vehicles, vehicle repairs and servicing, mobile mechanics, roadside assistance, valeting, MOT stations, and vehicle recovery services. Unlike standard car insurance policies, motor trade insurance caters to the unique risks associated with operating a motor trade business.
Who needs motor trade insurance?
Anyone involved in the motor trade, whether operating from business premises or as a mobile service, is likely to require motor trade insurance. This includes a diverse range of businesses such as car dealers, repair garages, body shops, valeters, classic car restorers, and more. Crucially, even if you’re self-employed and responsible for other people’s vehicles, having the right policy in place is vital. This is because relying on customers’ own policies to cover other drivers is becoming less common.
Types of motor trade insurance cover
Motor trade insurance policies typically fall into two main categories: road risk insurance and combined motor trade insurance.
Road risk insurance
Road risk insurance is the foundational element of any motor trade policy and is legally required for motor traders driving vehicles on public roads as part of their business activities. This applies to driving your own vehicles, customer vehicles, or those acquired for the business, such as vehicles purchased at auction for resale.
Road risk insurance offers different levels of protection:
Third-party only: Covers damage or injury to others.
Third-party, fire, and theft: Adds protection against fire and theft for vehicles in your care.
Comprehensive: The highest level, including third-party claims and damage to your own vehicles.
This type of insurance is generally suitable for smaller businesses like part-time car dealers or mobile mechanics.
Combined motor trade insurance
Combined motor trade insurance is a more extensive policy that combines various types of coverage, often favoured by larger businesses with physical locations.
Combined policies can include:
Road risk insurance
Premises insurance: Covers business locations against damage and theft.
Stock of vehicles cover: Protects vehicles held for sale.
Tools and equipment cover: Insures tools and machinery.
Liability insurance:
Public liability: For claims from the public for injury or property damage.
Employers’ liability: Required for businesses with employees, covering work-related injuries or illnesses.
Product liability: For claims related to faulty products sold.
Service indemnity cover: For claims due to faulty workmanship.
Business interruption cover: Helps with lost income and expenses during business disruption.
Other potential covers: May include money cover, sales and service indemnity, loss of MOT licence cover, directors’ and officers’ insurance, and engineering inspection cover.
Important considerations
Eligibility
To get motor trade insurance, you must be actively involved in the motor trade and operate a genuine, income-generating business. It is not for private individuals with multiple vehicles.
Factors influencing premiums
Premiums are affected by several factors:
Business size and number of employees: Larger businesses and more employees can increase costs.
Vehicle details: The type and number of vehicles handled impact the premium.
Coverage level: More comprehensive policies cost more.
Location: Areas with higher risk may have higher premiums.
Driver age: Younger drivers may result in higher premiums.
Claims history: A good record can lower costs, while claims may increase them.
Choosing the right policy
Compare quotes from different providers and work with a specialist insurer or broker who understands the motor trade. They can help tailor a policy to your specific needs. Also, understand the claims process.
Legal obligations
UK motor trade businesses have legal insurance requirements. Road risk insurance for driving on public roads is mandatory. Employers’ liability insurance is required if you have staff. Non-compliance can result in legal penalties and business closure.
By considering your business activities, comparing options, and selecting appropriate coverage, you can ensure your UK motor trade business is well-protected.
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